Microsoft says demand for Vista is strong: 180 million licenses sold

180 million licenses sold

Microsoft says demand for Vista is strong: 180 million licenses sold


Redmond (WA) – There was a small number hiding in Microsoft’s FQ4 (CQ2) quarter release – a number we did not catch initially: The company said 180 million Windows Vista licenses have been sold so far and that demand for the operating system has been growing over the past year. However, if those numbers are right, and if previous sales numbers provided by Microsoft are right as well, then demand may actually be slowing.

Microsoft’s thriving business and balance sheet is the envy of every business man. Over the past 12 months, the company had sales of $60.42 billion and a profit of $17.68 billion. You just know that the company is ready to expand further: Microsoft’s war chest currently holds more than $23 billion.

Looking a bit closer at the most recent quarter, the company said that “revenue growth was primarily driven by increased Windows Server and SQL Server revenue, increased licensing of the 2007 Microsoft Office system and Windows Vista, and increased Xbox 360 platform sales.” The terrible dollar exchange rate also helped to drive up foreign sales: Foreign currency exchange rates accounted for a $542 million or four percentage point increase in revenue during the quarter.

Windows Vista sales were said to have been particularly strong. Vista OEM revenue increased $420 million or 13%, driven by 22% growth in OEM license units. Revenue from commercial and retail licensing of Windows operating systems increased $138 million or 22%, primarily from Enterprise Agreements and anti-piracy efforts in emerging markets. OEM premium mix was 72% for the three months ended June 30, 2008. According to Microsoft, total worldwide PC shipments from all sources grew approximately 12% to 14%, driven by demand in both emerging and mature markets.

For the full year, Microsoft said that Vista OEM revenue increased $1.7 billion or 13%, driven by 16% growth in OEM license units. Revenue from commercial and retail licensing of Windows operating systems increased $209 million. Client software revenue (which also includes Microsoft Office) was only 28% ($16.86 billion) of Microsoft’s total revenue, but it delivered the lion’s share of profits – $13.05 billion.

Microsoft said that 180 million Vista licenses have been sold since the operating system’s launch in late January 2007, which is a huge number by any measure. But given the criticism the software lately has received we were wondering whether demand for Vista in fact is increasing or whether it is stable or perhaps even decreasing.

Microsoft said that it sold 20 million copies of Vista in its first month, 40 million copies in its first 100 days and 60 million in six months. We have to be a bit careful with these numbers as they actually include Express Upgrade sales – a program that was available since October 26, 2006 and allowed Microsoft to take advantage of the Christmas season and sell Vista while it actually had no product available.

This current number of 180 million units is not directly comparable as it includes all Vista sales, including licenses via various volume-licensing deals. There was only one number we could find that more directly compares to this new information: In late October of 2007, or just after the 1-year sales anniversary of Vista, Microsoft said that it had sold 88 million copies plus an additional 40+ million licenses, which adds up to about 128 million units total. Divided by 12, this gave Vista a sales pace of about 10.6 million units per month. Nine months later, Microsoft apparently has sold an additional 52 million units total, indicating a pace of just 5.8 million copies and licenses per month since October 2007.

This number, which includes retail copies and volume licensing is actually below the performance of sold retail copies in the first few months after Vista launch: By July 31, or slightly more than nine months after sales begin, Microsoft had sold 60 million retail copies – about 6.7 million units per months.

Clearly, only Microsoft knows the details about its real performance, some numbers reported are more than wishy-washy and let’s not forget that Microsoft deferred Express Upgrade revenue, which blurs sales and unit shipments estimates even further. But if the reported Vista sales numbers are close, we are actually a bit surprised that the figures are not higher, especially since Microsoft said that PC sales in fact are increasing, which should show unit growth on a per-month basis.

So, we are taking these numbers with a grain of salt, but we still can’t help but feel that the Vista picture isn’t quite as rosy as Microsoft is painting it. However, it still brings in the cash, no doubt about it.
http://www.tgdaily.com/content/view/38485/118/

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1 Comment »

  1. rasmasyean said

    Here’s your grain of salt…get the fact’s…not all the blind rumors…
    I ain’t a MS fanboi or anything, but I’m just sick of the idiotic remarks that have no base on reality. If you don’t like it, they don’t upgrade and stay in the stone age. For the rest of us who get it to work…wouldn’t you like to rain on our parade… Eat your heart out, man! 😛

    16.14% of internet users are Vista
    http://marketshare.hitslink.com/report.aspx?qprid=11

    1.4 billion internet users
    http://www.internetworldstats.com/stats.htm

    Assuming the usage rate is consistent around the world…
    1.4 billion * 16.14% = 226 million Vista internet users

    The only way the user base would be significantly less than this number is if for some reason, Vista users surf the internet WAY MORE than all other OS’s to skew the percentage up to 16.14%. I highly doubt this. And it’s probably more likely that that some Vista users don’t use the internet much because it’s for work mostly. Hence more likely there are more than 226 million Vista users.

    Chances are that Vista adoption in the “rich” (and more regulated) hitslink logged nations is held back a little by the expense of Vista. So that could mean that other “poorer” (Gov’t don’t give a crap) nations have a much greater than 16.14% Vista market penetration since you can like buy it at the local fruit shop for like $1, etc.

    http://www.nationmaster.com/graph/cri_sof_pir_rat-crime-software-piracy-rate

    Hey, if you include ALL of Asia? 500 million Vista users??? 😉

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